MDY Industries, LLC v. Blizzard Entertainment, Inc. and Vivendi Games, Inc. 629 F.3d 928 (9th Cir. 2010)

For those who followed our series of posts on this case, here is our final write-up and combination of analysis into a full write-up.

The case between MDY and Blizzard focused on the video game World of Warcraft (WoW). World of Warcraft is Blizzard’s incredibly popular massively multiplayer online role-playing game (MMORPG). In this game players must complete various quests such as collecting materials or defeating monsters. Through the completion of these in-game tasks a player’s character is able to gain experience and new skills and abilities. MDY and its creator Michael Donnelly, created a software bot called Glider which plays World of Warcraft for its users. This allowed Glider owners to progress their World of Warcraft characters while they were unattended.

In a suit filed with the U.S. District Court for the District of Arizona, MDY sought a declaratory judgment that the Glider bot did not infringe upon Blizzard’s rights. In response Blizzard counterclaimed and third-party complained seven claims:

  • Tortious interference with contract;
  • Contributory copyright infringement;
  • Vicarious copyright infringement;
  • Violation of the Digital Millennium Copyright Act (DMCA);
  • Trademark infringement;
  • Unfair competition; and
  • Unjust enrichment

On July 14, 2008, Judge Campbell for the U.S. District Court granted and denied in part the parties’ motions for summary judgment. Summary judgment was granted in favor of Blizzard with regard to MDY’s liability for tortious interference, contributory copyright infringement, and vicarious copyright infringement. On the other hand, the Court granted summary judgment in favor of MDY on part of the DMCA claim and on the unfair competition claim.

In its analysis of Blizzard’s contributory copyright infringement claims, the Court first looked at whether purchasers of World of Warcraft were legal “owners” of the client software. Under 17 U.S.C. § 117, owners of computer programs are allowed to create copies or adaptations of the computer program if it is an essential step towards utilization of the program. In the end the Court agreed with Blizzard’s arguments that World of Warcraft purchasers were only licensees of the game. As such players would be required to make use of the game within the scope of the End User License Agreement (EULA). In the EULA Blizzard specifically prohibits “the use of bots or third-party software to modify the WoW experience.”

The District Court further held that the ban on botting was related to Blizzard’s copyright interest and thus any users of Glider were infringing Blizzard’s copyright when they played World of Warcraft in violation of their limited license. Because MDY encouraged and profited from this infringement they could be found secondarily liable for this infringement.

A DMCA violation also occurred where the Glider program circumvented Blizzard’s anti-cheat program Warden. Warden is a security application that controls access to the game.

On December 14, 2010, MDY appealed this judgment to the Ninth Circuit Court of Appeals. In the Court’s ruling, the summary judgment against MDY for contributory copyright infringement was reversed. The Court stated, “for a licensee’s violation of a contract to constitute copyright infringement, there must be a nexus between the condition and the licensor’s exclusive rights of copyright. Here WoW players do not commit copyright infringement by using Glider in violation of the [terms of use].”

This analysis was based on a Federal Circuit case, Chamberlain v. Skylink, 381 F.3d 1178 (Fed. Cir. 2004), which stated there must be a nexus between access and the copyright infringement at issue. As such the Ninth Circuit declined to follow Chamberlain and upheld the judgment that MDY violated the provisions of the DMCA which prohibit the trafficking in copyright circumvention technologies. This was specifically applied to the dynamic nonliteral elements of World of Warcraft. Players already had access to the literal elements of WoW when it was copied to their hard drives. However, the nonliteral and dynamic elements can only be experienced live on the game’s servers and this access is controlled by the Warden program. As such, MDY was found in violation of the DMCA in this manner and the permanent injunction against MDY to prevent future DMCA § 1201(a) violations was affirmed. Blizzard was unable to prevail on their § 1201(b)(1) claim though as they could not prove that Warden “effectively protects a right” of Blizzard under the Copyright Act.

Finally, the summary judgment for tortious contract interference was vacated and remanded to the district court for further consideration because the law standard when viewing all the facts was not met as there were outstanding issues of material fact.

In an attempt for further rehearing of the case MDY attempted to assert Glider was an “independently created computer program” which would exempt it from § 1201(a). However, because this issue was not raised at the district court or presented in the parties’ briefs on appeal the Court declines to hear it. Thus, the motion for panel rehearing was denied and no further petition for rehearing will be entertained by the Court.

This case notably extended copyright protection to the dynamic nonliteral elements of a computer program while also declining to require a nexus between potential DMCA violations and copyright infringement. Previously, running a computer program on a device copied the program to a user’s RAM which similarly removed some of the copyright owner’s protection in the program. However, in copyright of the dynamic nonliteral elements, Blizzard was able to retain control and rights over World of Warcraft despite the literal elements being copied to a user’s device upon use.